Medicare subsidy for retirees to remain unchanged in 2014

July 11, 2013

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INDIANAPOLIS – Probably the thorniest issue at the Indiana Annual Conference Session this spring in Indianapolis was the continuation of the Conference’s existing Medicare Subsidy Programs for retired clergy and retired clergy spouses of the Indiana Conference.

Following the recommendation of the Retiree Health Insurance Funding Task Force, established by Bishop Mike Coyner as directed by the 2012 annual conference session, the Conference Board of Pensions and Health Benefits made these recommendations to the 2013 session:

Continue to fund the Surviving Spouse Subsidy at $250 per month;

Reduce the subsidy amount from $5 to $4 per service year for retired clergy and spouse effective January 1, 2014 for all retiree/spouse participants; and

Cease providing a subsidy for participants (and spouses) who retire after July 1, 2014.

The last point was extended to 2015 by the board as the proposals went to the session for consideration.

A group of “concerned clergy” composed primarily of retired clergy of the Indiana Conference challenged the proposed actions, especially the ceasing of subsidy for future retirees. The motion from the floor was to defeat the last two recommendations of the board.

The conference members approved the first recommendation to continue funding the $250 per month health care subsidy for Surviving Spouses.

In a standing vote of the conference members, the proposed reduction of the subsidy and the cessation of the funding for future retirees were narrowly defeated. The defeat meant that the current Conference Medicare Supplement Programs for retired clergy and spouses will remain the same for 2014.

The defeated proposal also meant a substantial increase of the 2014 Indiana Annual Conference Budget of up to $700,000.

In later action, the proposed Conference Council on Finance and Administration proposed 2014 conference budget of $13.2 million was increased to $13.9 million and approved to include the expenses of extending the cost of the Medicare subsidy through 2014. The increase was approved meaning the conference also approved $13.9 million for needed tithe income to finance expenses of the conference including the conference’s General Church obligations of more than $5 million.

The budget has been returned to the Indiana Conference Directors, who will bring a revised budget to an Oct. 26 meeting of the Conference Leadership Table, the group elected to carry on the necessary business of the conference between sessions.

One reality pointed out by the board is that pension payments continue to rise as fewer clergy are dependent upon pre-1982 pension benefits as they retire. More current pension plans are providing a higher level of income to those who have served 35 years or more in ordained ministry as a clergy member of the conference. These higher payments mean that Medicare supplements are more affordable to those receiving higher pensions than previously retired clergy.

… the proposed reduction of the subsidy and the cessation of the funding for future retirees were narrowly defeated.

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